USD/JPY: Sustainable gains seen above 111.95 – UOB

Further gains in USD/JPY look likely on a breakout of the 111.95 level, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Yesterday, we highlighted that USD ‘could break 111.70’ but we held the view that ‘the next major resistance at 111.95 is unlikely to come under threat’. Our view was not wrong as USD rose to 111.78 even though we did not anticipate the subsequent sharp pullback (low of 111.19). For today, USD is likely to trade sideways, expected to be within a 111.15/110.60 range.”

Next 1-3 weeks: “On view from yesterday (06 Oct, spot at 111.50) still stands. As highlighted, shorter-term upward momentum is beginning to build but USD has to close above 111.95 before a sustained advance can be expected. At this stage, the prospect for USD to close above 111.95 is not high but it would increase as long as USD does not move below 110.90 within these couple of days.”